The Mortgage Process

Here are the major steps of the mortgage process for Samson Properties customers working with FHM:

1. Download the LoanNow App. You can quickly and easily share your co-branded LoanNow mobile app with clients via text or email. Once downloaded, your client will have access to your customized links, financing calculators, document uploads, and contact information for their FHM loan officer.
2. Get Pre-Qualified with an FHM Loan Officer. Your client meets with an FHM loan officer to discuss their needs, understand the best loan options for their situation, and to find out how much they may qualify to borrow.
3. Sign the Purchase Agreement. Once your client selects their dream home, they will work with you to complete the Purchase Agreement.
4. Formal Loan Application. Your FHM loan officer will help the client complete and submit their full loan application via LoanNow.
5. Loan Estimate (LE). The client will receive the LE within three (3) days of submitting the formal loan application. The LE outlines initial estimates of the costs associate with the mortgage loan. Your client should review this carefully and ask their loan officer for help understanding any terms, fees, or charges they have questions about.
6. Loan Processing and Underwriting. FHM’s in-house team will review your client’s initial documentation and financial information. At this time, your client may be asked to provide a few pieces of additional information.
7. Final Loan Approval. FHM’s in-house underwriting team reviews the completed home appraisal and the client’s financial documentation, including a new credit report. FHM’s team may reach out to the client to request additional documentation prior to issuing final approval.
8. Closing Disclosure (CD). Your client will receive the CD no later than three (3) days prior to closing. The CD shows the final costs associated with the loan. Your FHM loan officer can answer any questions the client has during this time.
9. Closing and Settlement. This is when the buyer becomes the legal owner of the home. Once all documents are signed and any money due at settlement has been paid, the buyer will receive the keys to their new home.

Conditional approval happens within one to two weeks of the buyer completing the full application and submitting all supporting documentation to FHM.

Final approval happens once all terms and conditions listed in the conditional approval have been reviewed and deemed completed by FHM’s underwriting team.

Your client’s FHM loan officer will review their credit and financial information to help determine how much they can afford to spend on their new home build. FHM will provide a list of all supporting documentation needed.

During this meeting, the loan officer helps determine how much the buyer may qualify to borrow and go over which loan options may be best for their needs. It is always FHM’s goal to work with each client to develop a plan to meet the short- and long-term goals for their family. With these initial figures in hand, your client will have everything they need to make a confident, well-informed decision about moving forward.

Pre-qualification or pre-approval tells clients what price range they can afford and helps the mortgage process go smoother and faster.

When it comes time to make an offer on a home, pre-approved/qualified clients have more buying power. An offer accompanied by a pre-approval/qualification letter signals to the seller that your client is able to afford the home.

The client will have also had a chance to discuss various loan options with a loan officer and will be more confident and prepared to move forward once it’s time to submit the full loan application.

The first question you should ask is “Have you already spoken with a First Heritage Mortgage loan officer?”

If the answer is no, the best course of action is to share your co-branded LoanNow app with the client and let them know that their dedicated mortgage expert will be reaching out to them shortly to get to know them and their goals.

Not necessarily. Mortgage lenders pull a credit report during the pre-qualification process. This is known as a hard inquiry and can lower credit scores by a few points. The good news is that if any other mortgage lenders, like FHM, check the client’s credit within 45 days of the first credit check, those checks don’t count as additional hard inquiries.

A credit report will be obtained in order to evaluate a client’s qualifications and eligibility for a loan. The credit report will be paid for as part of the overall loan application process, along with paying for the appraisal prior to closing.

The day of closing or settlement is the day the buyer becomes the legal owner of the home.  Here is a basic outline of what buyers should expect:

• Any remaining closing costs, as listed in the Closing Disclosure, are paid by the buyer.
• The seller will sign documents to transfer property ownership.
• The buyer will also sign the Closing Disclosure which lists all costs related to the home sale, as well as a mortgage note stating their promise to repay the loan and a mortgage or deed of trust securing the mortgage note.
• The title company will register the new deed in the buyer’s name. Once all documents are signed and any money due at settlement has been paid, the buyer will receive the keys to their new home.

Closing costs are the fees associated with the home buying transaction that are paid to the mortgage lender. These are generally between 2% and 5% of the home purchase price depending on the type of loan and its structure.

Closing costs vary depending on the location of the home and the type of loan program being used.

• Typical property-related closing costs include prepaid loan interest, escrow fees, home inspection, property taxes, and HOA fees.
• Typical loan-related closing costs include lender loan origination fees, discount points and other third-party fees paid to companies that perform certain loan-related tasks on behalf of the lender such as the appraisal, flood certification, and credit report.
• Typical title company closing costs include title/attorney fees, title search fee, recording fees, and transfer taxes.
• Other insurance-related costs paid at closing may include mortgage insurance, FHA/VA/USDA fees, or lender and owner title insurance.

A breakdown of these fees specific to each borrower is provided in the Closing Disclosures sent ahead of settlement. As always, your FHM loan officer is here to provide assistance and guidance for any questions you or the buyer may have.

This is the fee the lender charges the borrower for making the mortgage loan. Origination services include taking and processing the loan application, underwriting and funding the loan, and other administrative services. Government laws require that these fees be shown as the Loan Origination Fee on the Loan Estimate (LE) and the Closing Disclosure (CD).

This fee is to pay for an appraisal report made by an appraiser to establish the value of the house.

NOTE: The appraisal is not a home inspection.

The LE or Loan Estimate is the Initial estimate of the costs associated with the loan.  Your loan officer can help the client understand the fees and charges shown on the LE.  The LE must be sent to the borrower within three (3) days of completing a full loan application.

The CD or Closing Disclosure shows the final costs associated with the loan.  Your loan officer can help the client understand the fees and charges shown on the CD.  The CD must be sent to the borrower three (3) days prior to closing to give the borrower time to review the final numbers.

In some cases, these numbers can change prior to settlement and the final CD which is signed at settlement will capture any last-minute changes that had to be made.  Whenever possible a new CD will be provided to the client prior to closing if changes had to be made after the initial CD was sent.

This fee covers the cost of a credit report, which shows a borrower’s credit history. The lender uses the information in a credit report to help decide whether or not to approve the loan and how much money to lend.

Property taxes are levied on real estate by local and state governments. When purchasing a home, it’s important to factor in property taxes as part of the overall budget.

The amount of property taxes for a specific home depends on the location of the home and its assessed value. Talk to your FHM loan officer for an accurate determination of what property taxes may be on a specific home and how that may factor into your buyer’s monthly payments.

There are several reasons why a loan application may be denied. Some of the most common situations that may lead to a mortgage being denied include:

• Lack of employment history or a change in employment status
• Debt-to-Income (DTI) ratio exceeds the limit required by the loan program
• Derogatory credit events like a history of late payments, bankruptcy, tax liens, or civil judgments
• Insufficient funds for a down payment and closing costs
• Missing or omitted information on the loan application
• Red flags on bank statements
• Recently opened credit accounts which add additional debt and impact the borrower’s ability to repay the loan

Yes. The amount a buyer is pre-approved to borrow is not a guarantee. It’s based on information provided during the pre-approval process. There are many reasons an application could be denied even after pre-approval. For example, the buyer’s financial situation could change before they close on the home, or the lender’s mortgage guidelines could change after pre-approval.

First, talk to your FHM loan officer for a full explanation of what happened. The client will receive written notification of the denial status along with a copy of the credit report that factored into the denial. Make sure your client knows that FHM is dedicated to helping them reach their goals.

Our team of loan experts and extended network of financial professionals are available to assist clients who are denied in order to provide the tools necessary to improve their circumstances and prepare for a more successful loan application in the future.

FHM has a variety of loan programs with flexible terms available for qualifying self-employed borrowers. Contact your FHM loan officer to learn more about special financing options for your self-employed clients.

FHM is committed to providing innovative solutions to qualified borrowers who can demonstrate their ability to repay, including borrowers with negative credit events such as bankruptcies, foreclosures, deed-in-lieu of foreclosure, or short sales.

Get in touch with your FHM loan officer to discuss the best way to address your client’s specific situation and help them reach their home financing goals.

Yes. FHM offers loan programs to green card holders and permanent-resident aliens. In addition, FHM provides several financing options for buyers with a work visa as well as other specific situations. It is best to speak with your FHM loan officer for the most up-to-date information on these programs, as the guidelines change regularly.